Exam 10: Reporting and Analyzing Liabilities

Wolford Company borrowed $2,000,000 from U.S.Bank on January 1, 2019 in order to expand its mining capabilities.The five-year note required annual payments of $520,872 and carried an annual interest rate of 9.5%.What is the balance in the notes payable account at December 31, 2020, after the annual payment?

From an accounting standpoint, all of the following are contingencies that must be evaluated for off-balance sheet purposes except

Al's Bookstore has collected $950 in sales taxes during April.If sales taxes must be remitted to the state government monthly, what entry will Al's Bookstore make to show the April remittance?

A cash register tape shows cash sales of $8,000 and sales taxes of $400.The journal entry to record this information is

If the market rate of interest is greater than the contractual rate of interest, bonds will sell at a discount.

Winrow Company received proceeds of $754,000 on 10-year, 8% bonds issued on January 1, 2019.The bonds had a face value of $800,000, pay interest annually on December 31, and have a call price of 101.Winrow uses the straight-line method of amortization.What is the amount of interest expense Winrow will show with relation to these bonds for the year ended December 31, 2019?

Moss County Bank agrees to lend the Sadowski Brick Company $500,000 on January 1.Sadowski Brick Company signs a $500,000, 6%, 9-month note.What entry will Sadowski Brick Company make to pay off the note and interest at maturity assuming that interest has been accrued to September 30?

Moss County Bank agrees to lend the Sadowski Brick Company $500,000 on January 1.Sadowski Brick Company signs a $500,000, 6%, 9-month note.The entry made by Sadowski Brick Company on January 1 to record the proceeds and issuance of the note is

Ervay Company has $3,500,000 of bonds outstanding.The unamortized premium is $50,400.If the company redeemed the bonds at 101, what would be the gain or loss on the redemption?

Scribner Company issued $800,000 of 8%, 5-year bonds at 106.Assuming straight-line amortization and annual interest payments, how much bond interest expense is recorded on the next interest date?

The interest charged on a $90,000 note payable, at the rate of 6%, on a 90-day note would be

Payroll taxes include the employer's share of Social Security taxes as well as state and federal unemployment taxes.

The present value of a $10,000, 5-year bond, will be less than $10,000 if the

Unearned revenues should be classified as Other Revenues and Gains on the income statement.

If the market rate of interest is greater than the contractual rate of interest, bonds will sell

The debt to assets ratio measures the percentage of the total assets provided by creditors.

If bonds are issued at a premium, the carrying value of the bonds will be greater than the face value of the bonds for all periods prior to the bond maturity date.

Sales taxes collected by a retailer are recorded by

The following totals for the month of April were taken from the payroll records of Metz Company. The entry to record accrual of employer's payroll taxes would include a

The current carrying value of Kennett's $800,000 face value bonds is $797,000.If the bonds are retired at 102, what would be the amount Kennett would pay its bondholders?